South Korean Kospi Plummets 10.84% on Tech Sell-off, Following Wall Street

The main stock index in Seoul, the Kospi, experienced a dramatic plunge of 10.84% in Tuesday's session, heavily impacted by the sharp decline of technology stocks and mirroring a downward trend on Wall Street.

The index fell 732.09 points, closing at 6,023.66. The Kosdaq index, which comprises technology and mid-cap companies, also suffered, shedding 7.72% or 59.01 points to end at 705.85 units. The volatility was so pronounced that the Korea Exchange activated a 'sidecar' mechanism on the Kospi, temporarily suspending programmed trading after the Kospi 200 futures index dropped more than 5% within a minute.

This downturn occurred despite geopolitical news, including U.S. President Donald Trump's suggestion of new peace negotiations with Iran, which had led to a drop in Brent crude oil prices. The primary drivers of the market's decline were major South Korean tech firms. Samsung Electronics, the local benchmark, saw its shares fall 13.39%, while its rival SK Hynix depreciated by 14.65%. Other technology-related companies, such as SK Square and Hanmi Semiconductor, also experienced significant losses.

The sell-off extended to the automotive sector, with Hyundai Motor shares dropping 9.68% and its affiliate Kia falling 6.6%. Defense stocks also saw declines, with Hanwha Aerospace down 2.67% and Korea Aerospace Industries down 2.19%. The market's sharp reaction appears linked to investor nervousness surrounding upcoming quarterly earnings reports from major tech companies and doubts about the sustainability of the artificial intelligence boom.